Ways to Acquire Regular Loan from Traditional Financial Institutions
Anyone wishing to take out a loan in Germany is faced with a large number of so-called test procedures with regard to the assessment of creditworthiness. Probably the most well-known as well as “notorious” procedure is the credit scoring or credit scoring, which is widely known rather under the term “Schufa information”. Those who suffer from so-called negative features are 99% barred from the doors to a regular loan from traditional financial institutions. It is therefore all the more important to keep your SCHUFA clean or to know how to improve a possibly less good credit score. But this is not so easy, because the calculation of the credit score, is a corporate secret that consumers usually have no influence and thanks to a court ruling from the year 2015 will not have in the future.
From experience, however, there are some tips and tricks that can have a positive impact on your own Schufa score. The most important tips we have summarized for:
Credit card, checking account, mobile phone contracts: less is more
- Keep checking accounts and credit cards low: too many checking accounts can often have a negative effect on the Schufa score. This also applies to credit cards. If you have too many cards and accounts, it is easier to lose track of your finances and run the risk of producing negative endorsements at SCHUFA. Not consistently required accounts and credit cards should therefore be terminated.
- Avoiding credit facilities: If the money is ever scarce, it is convenient to use the credit line of the current account. But due to the high interest rates for a credit line, this can quickly become a debt trap. If the credit line is then terminated by the bank, because the account is overdated for a long time and monthly payments are missing, you must count as a consumer with a negative Schufa entry.
- Unnecessary mobile phone contracts cancel: What applies to checking accounts and credit cards, also applies to mobile phone contracts. If some mobile phone contracts are already stored in your Schufa file, it is possible that one provider will refuse to conclude another mobile phone contract. If you cancel superfluous contracts, this not only protects the Schufa score but also your own wallet.
Zero-percent financing and installment credit: Do not buy too much on the pump
- Do not conclude too many dealer financing: Financing at the dealer, often even offered as zero-percent financing, sounds tempting – who has just not saved enough, can still afford the desired product and pay off in installments. So you get a loan – accordingly, a zero-percent financing is entered in the Schufa file. If things are regularly bought on “pump”, this will inevitably have a negative effect on the SCHUFA score.
- Pay attention to Schufa neutrality when making a loan request: Before taking out a loan, it is advisable to compare the terms of various providers exactly. However, as a consumer, you should obtain several credit offers, making sure that only one (“credit request form”) is sent to the Schufa by a credit intermediary, a comparison portal or the bank, and if this information is only reported to the Schufa, this has no negative consequences Effects on the Schufa score.
Pay bills and contracts on time!
- Paid bills on time: As banal and natural as it may sound, but a misconduct in this point can have fatal consequences – the punctual payment of bills, whether electricity, rent or mobile bills! The same applies, of course, to loan installments, which should always be paid on time. If an invoice is not paid, companies may pass on this information to Schufa after the second written reminder.